Next Generation Supply Management Defined

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Daily Archives: May 4, 2017

… most of what America is now is just boxes going back and forth …
Stewie, Family Guy, Season 15, Episode 18

Seth MacFarlane is extremely insightful when he chooses to be. We not only have boxes on pallets in containers going back and forth between countries but we have boxes in trucks going back and forth between local warehouses, stores, postal outlets, and consumer residences … it’s a boxes in, boxes out society. And it doesn’t matter how much we optimize the boxes coming in if the boxes going out still cost too much.

The point is, you don’t just optimize the inbound supply chain if the outbound supply chain consists of lots of small deliveries that will considerably eat up the savings you worked so hard to generate. In order to keep costs down, you have to optimize these little boxes as well.

This means that you not only need to optimize:

packaging costs

(outbound) distribution costs

insurance costs

But you shouldn’t do separate sourcing events, because packaging is used inbound and outbound. Plus, distribution inbound and outbound uses trucks … and while inbound might typically use big trucks and outbound might typically use small trucks, not only is the situation sometimes reversed, but the same carriers often have big trucks and little trucks and the more volume you can source, the better the deal you can get.

And then there is insurance. While the insurance inbound will likely be of the supply chain variety, and insurance outbound will likely be small carrier insurance / goods insurance, it doesn’t mean that both policies can’t be sourced from the same provider, and that you can’t get a better deal simultaneous sourcing.

In other words, if you really want to save money and achieve sourcing success in Box Nation, you have to consider all the boxes, not just the inbound ones. And if you want to be successful, use optimization. Check the archives (linked) for more info.